Focus on Service Process Chapter 5

Chapter Objectives 1.Discuss the stages of operational competitiveness. 2.Appreciate the relationship between operations and marketing connected to developing service delivery systems. 3.Consider the challenges associated with applying peak efficiency models to service organizations and recommend strategies that overcome some of these difficulties. 4.Explain the art of service blueprinting as it relates to the design of service delivery systems

Stages of Operational Competitiveness 1. Available for Service2. Journeyman 3. Distinctive Competencies Achieved 4. World Class Service Delivery

Stage 1: Available for Service – operations are a “necessary evil” – operations are “reactive” – the primary mission is to avoid mistakes – technological investment, training, and personnel costs are minimized Four Stages of Operational Competitiveness

Stage 2: Journeyman – prompted by the arrival of competition – operations become outward-looking – investment in technology is linked to long-term costs savings – processes are developed, implemented, and monitored – operations still viewed as a secondary function Four Stages of Operational Competitiveness

Stage 3: Distinctive Competencies Achieved – the firm has mastered the core service – understands complexity of making changes – operations are now viewed equal with other departments – view of technology changes from “cost savings” to “enhancing the customers experience ” Four Stages of Operational Competitiveness

Stage 4: World Class Service Delivery – company’s name is synonymous with service excellence – become a fast learner and innovator – technology provides a means to accomplish tasks that the competition cannot duplicate Four Stages of Operational Competitiveness

Marketing and Operations: Balance is Critical Marketing Effectiveness Operational Efficiency

Marketing and Operations: Balance is Critical Customer Needs & Wants Operational Capabilities

Operations Efficiency Models of Manufacturing Thompson’s Perfect-World Model The Focused-Factory Concept The Plant within a Plant Concept

Thompson’s Perfect-World Model To operate efficiently, a firm must be able to operate “as if the market will absorb the single kind of product at a continuous rate and as if the inputs flowed continuously at a steady rate and with specified quality”

The Focused-Factory Concept An operation that concentrates on performing one particular task in one particular part of the plant Used for promoting experience and effectiveness through repetition and concentration on one task necessary for success

The Plant within a Plant Concept – An operation that breaks up large, unfocused plants into smaller units buffered from one another so that they can each be focused separately – Organizations buffer environmental influences by surrounding their technical core with input and output components

The Plant within a Plant Concept (Nissan Aguascalientes Mexico, 2014)

Operation Efficiency Models Can they work for service operations?

Applying Efficiency Models to Services Servuction Model: Customer Experience Other Customer Organizations and Systems (Invisible) Servicescape Contact Personnel/ Service Providers What model describes the service customer experience?

Applying Efficiency Models to Services Servuction system is an operations nightmare – impossible to use inventories – problems with separating production from the customer – system is directly linked to the market – massive problems in capacity planning and utilization

Possible Solutions to Service Operation Problems 1.Isolate the technical core 2.Production-lining the whole system 3.Creating flexible capacity 4.Increasing customer participation 5.Moving the time of demand

Possible Solutions to Service Operation Problems 1.Isolate the technical core – Different management philosophies should be adopted for each unit of operation – technical core should be subjected to production- line approaches – high contact areas should sacrifice efficiency in the interest of the consumer

Possible Solutions to Service Operation Problems Class Exercise - Jigsaw: In groups learn about the following strategies of overcoming problems in service operations: 2.Production-lining the whole system 3.Creating flexible capacity 4.Increasing customer participation 5.Moving the time of demand Explain your findings in new groups.

Which approach do they use?

Which approach do they use? Sleepbox Hotel Tverskaya, 2013

Which approach do they use? (Ground Café, n.d.)

Service Blueprinting

Service Blueprint Definition Service Blueprint is a picture or a map analyzing the process, people and systems involved in the delivery of a service. – Useful tool for service design – Helps the communication between operations and marketing and highlights potential problems on paper before they occur – Used to identify innovation opportunities and ways of improving the service quality (Steijger, 2008)

Steps of Creating an Operations Service Blueprint 1.Identify direction in which processes flow 2.Identify the time it takes to move from one process to the next 3.Identify the costs involved with each process step 4.Identify the amount of inventory build-up at each step 5.Identify the bottlenecks in the system

Components of an Operations Service Blueprint Bottlenecks – points in the system at which customers wait the longest periods of time. Fail points - points in the system at which the potential for malfunction is high and at which a failure would be visible to the customer and regarded as significant.

Blueprint for Cafeteria-Style Restaurant p. 130

Service Blueprinting Components All tangibles that customers come in contact with that influence customer perception of quality Physical Evidence All steps that customers take or experience as part of service process Customer Actions The contact employee actions that involve face-to- face interactions with customers Contact Employee (on-stage) Contact employee actions other than face-to-face, call/ /preparation and other activities Contact Employee (back-stage) Activities included into service process but performed by individuals other than contact employees Support Processes (Gremler, 2011)

Service Blueprinting Video (Alex Masters Project, n.d.)

Constructing Service Blueprint for Marketing 1.Identify the service to be blueprinted. 2.Identify the customer segment that received the service. 3.Map the service from the customer’s point of view. 4.Draw the line of interaction. 5.Draw the line of visibility. 6.Map the service from customer’s point dividing it into visible and invisible activities. 7.Draw the line of internal interaction. 8.Link customer and contact person activities to support functions. Indicate possible bottlenecks and fail points. 9.Add the physical evidence. (Gremler, 2011)

Line of interaction Line of visibility (Gremler, 2011) Line of internal interaction

Constructing Service Blueprint For next class: bring different colors of post-it notes, scissors and thick strings/threads. Task: following the steps of the service blueprinting for marketing create the service blueprint of the LRJJ Culture Day customer’s experience.

References Alex Masters Project. Retrieved from Gremler, D.D. (2011). Service blueprinting: Designing service from the customer’s point of view. Retrieved from cticeDevelopment/2011/Phonak_Service_Blueprint_Slides_ pdf Ground Café. Retrieved from Nissan Aguascalientes, Mexico. Yates Construction. (2014). Retrieved from 2/#.U4MDNXKSxqU Sleepbox Hotel Tverskaya by Arch Group. (2013). Retrieved from group/ Steijger, M. (2008). How to use service blueprinting to achieve competitive advantage. Retrieved from